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CES 2015: The secret to Sling TV's success

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At first glance Sling TV's hype is all about the business model: no onerous contracts, a low entry price and access across a slew of devices, all with a bundle of content viewers have usually needed a cable TV package to get. But the truth about our Best of the Best CES winner is that while it's smaller and travels better -- this is still the same old pay-TV bundle, and constructed by the same old companies to repeat the model many have grown tired of. So why am I still leaving Las Vegas thinking I've had my first good look at TV's future? It's the experience.

Sling is hardly the first built-from-the-ground-up service for watching video on the internet -- Netflix, Hulu and all the rest have been doing it with TV-quality content for quite some time. This is different because it feels like the live TV experience I'm used to, but designed in the internet age. Unlike others that tried (and have mostly failed) to execute this combo by building a foundation on the shifting sands of existing cable TV and IR blasters -- we mean you, Google TV and Xbox One -- Sling TV doesn't have or need channel numbers hanging on like vestigial limbs. It's all right here: Your live TV is an app; it's organized like one; and in all of the demos I saw, it responded like one.

Editor's Choice: SlingTV and AirDog

The now-departed Aereo tried a similar approach, and also had an element Sling TV is missing with its DVR support. The problem I saw there was the cost, at $12/month for a few channels, and the uncertainty over whether it would survive the inevitable legal challenges -- which we now know it didn't. Even the actual UI and experience brought very little new to the table, with the same, old grid guide and controls. As Sling TV CEO Roger Lynch explains, the company focused on a UI that would work across the many devices where its service is available, and reflect the way it expects users to watch TV -- both live and through video on-demand.

In this Thursday, Dec. 20, 2012, photo, Chet Kanojia, founder and CEO of Aereo, Inc., stands next to a server array of antennas as he holds an antenna between his fingers, in New York.  Aereo is one of several startups created to deliver traditional media over the Internet without licensing agreements. Past efforts have typically been rejected by courts as copyright violations. In Aereo’s case, the judge accepted the company’s legal reasoning, but with reluctance. (AP Photo/Bebeto Matthews)

That expectation is also where it splits from options like Aereo or the Hopper DVR provided by its owner, Dish Network -- Sling TV's lack of DVR and focus on live TV/VOD means ads are part of its reality. We didn't see or hear anything about making them unskippable in any way, but that's an idea that has slowly permeated the cable video on-demand landscape and may be hard for the new company to resist. It already has plans to do dynamic ad insertion -- inserting new or specifically target ads into live streams or replays of previous broadcasts -- so ad-free Netflix this isn't.

A Look at Sling TV

Even as we applaud the slick implementation and savvy dealmaking of Sling TV, the parts of the existing TV biz it's still tied into stand out as potential pitfalls. Even at $20 (before add-on packages or PPV movie rentals), it's more expensive than other streaming services, and while it makes perfect sense for SportsCenter addicts to get their fix for a relatively low price, it might not appeal to all. As Dave Zatz pointed out on Twitter, some could toss a few bucks to a friend and use their WatchESPN login, while non-sports fans will have to swallow the fact that a large part of their money is going to support the same channels that probably drove them away from cable in the first place.

There's no evidence that the individual channels are getting any cheaper, and if you're waiting for à la carte channels (that my former podcast partner Ben Drawbaugh would always point out are still bundles themselves), then you're still waiting. Think about how people freaked out in 2011 when Netflix unbundled streaming and priced it at the unthinkable sum of $7.99 per month. The streamer wised up the second time around by giving existing users a two-year grace period, plugging in a bunch of new content and conveniently timing its price change during a battle with the hated telephone and cable companies. What will the reaction be the first time Sling TV has to adjust its prices? Also, given that it's tied into Dish Network, what will happen when it loses a channel or two during a dispute over rates?

Right now, Dish Network is living without Fox News -- in a dispute that probably has something to do with trying to get Fox's channels on Sling TV -- while previous battles have covered AMC, CNN and others. Since users can come and go without much friction, they might bail the instant a favorite channel goes blank in numbers we don't usually see on cable or satellite, giving channel owners more leverage in negotiations. According to reports by Peter Kafka on Re/code and Sports Business Journal's John Ourand, ESPN has an option in its contract to bail (or probably renegotiate) if the service reaches a certain number of users. That's a lot of power for channel owners, and if Sling TV significantly bypasses its targeted audience of cable-never millennials, they may try to rebalance things in favor of their more profitable deals with traditional pay-TV.

The lack of network TV channels is also worth noting. CBS is pushing its shows online and Hulu is always there, but that's another extra fee or two. Cord-cutters may look to antennas paired with boxes from TiVo or ChannelMaster, but that requires an upfront investment and segments TV watching across yet another box. SiliconDust's HDHomeRun can help push antenna-delivered TV to your TV, game system, tablet or phone, but I wonder if we'll ever see a Slingbox on shelves built specifically to deliver network TV alongside the existing streams (remember the Sling Monitor?).

The outlook isn't all cloudy though, and maybe the team can navigate its way to TV nirvana without being tripped up. The low price and lack of contracts are enough to cause immediate interest, and we've heard signups are going so fast that at launch, it may be limited only to those who have pre-registered. In the end, it may not even matter if Sling TV wins, as Sony and Verizon have committed to their own visions of internet TV that we expect to see this year. Netflix and Amazon may enjoy the fruits of their original content at the Golden Globe awards tonight, and even traditional cable companies like Comcast and Charter are moving their services to the cloud or testing IPTV.

In a changing TV future, they could flip a switch and go nationwide if that's what's necessary; maybe if they had their own internet video to sell, we could all see speeds go up and caps fade away. Much more disappointing than anything else is the realization that right now, the future of TV looks like it will be divvied up across the same batch of contenders that spent the last few decades wasting our time and money, just changing outfits in the elevator and popping up under slightly different names. I'm still excited by Sling TV, but it's really time for some new contenders.

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